Post-reform Kenya likely to get IMF loan

[Ulhas Joglekar]

7 January 2000
Post-reform Kenya likely to get IMF loan
WASHINGTON: Kenya must accelerate structural reform and do more to fight
corruption in order to win back the confidence of financial markets, the
International Monetary Fund said.
Summarizing a December 16 review of the Kenyan economy, an IMF statement on
Wednesday said recent economic progress created a "good basis" for talks
about a new IMF loan. The fund halted lending to Kenya in mid-1997 because
it was worried about what it terms "governance" -- an IMF code word for
official corruption.
"Directors stressed...that significant and sustained efforts will be needed
before a comprehensive programme that addresses the concerns of the Kenyan
population, investors and donors could be put in place," the IMF said.
Kenyan financial markets rallied late last year on news that the IMF was
ready to restart talks on lending.
Finance minister Chris Okemo said on Wednesday that preliminary discussions
would open on January 24 and that the government was committed to enhancing
transparency, strengthening the implementation of the budget and improving
the operation of anti-corruption agencies.
The IMF noted that corruption, a deteriorating infrastructure and an
inefficient services sector had depressed investment, lowered confidence and
hurt Kenyan growth.
Projecting a slim 1.6 percent rise in gross domestic product in 1999, down
from 1.8 percent in 1998, it said: "Investor confidence has remained weak
and growth has continued to decline".
The IMF welcomed government efforts to curb corruption, but said more was
needed.
"Directors commended Kenya for pursuing generally cautious macroeconomic
policies since early 1998, but noted that weak economic growth had persisted
over this period, partly on account of slow progress in the areas of
governance and structural reform," it said.
"They observed that this had had adverse effects on investor and donor
confidence and had resulted in increased poverty and deteriorating social
indicators." (Reuters)
For reprint rights: Times Syndication Service
|Disclaimer|
For comments and feedback send Email
Bennett, Coleman & Co. Ltd. 1999.